Africa's Economy accelerates while Europe stagnates

AFRICA ECONOMIC OUTLOOK - Africa's economy is growing at a rate of 4.5% and in 2013 it is expected to reach 4.8% according to African Economic Outlook. However, more than half of the region's unemployed are aged 15 to 24 and if the right steps are not taken to combat unemployment and under-employment then the region's economic growth may stunt.

 After an initial rebound from the 2009 world economic crisis, Africa’s economy was undermined last year by the Arab uprisings. The continent’s growth fell back from 5% in 2010 to 3.4% in 2011. With the recovery of North African economies and sustained improvement in other regions, growth across the continent has accelerated. But commodity prices -crucial for Africa - have declined from their peak due to weaker demand and increased supply, and some could fall further. This is due to the existing problems in the world economy especially as Europe confronts its debt crisis.  But prices are expected to remain at levels favourable for African exporters according to reports on the AEO website.

EUROPE ECONOMIC OUTLOOK - On the other hand, the G20 group of leading world economies has reported slower growth in the three months ending in June. National output as measured by GDP grew at an annual rate of 3% in the second quarter compared with 3.2% in the first quarter, (a growth of 0.2%) official data showed compiled by the Organisation of Economic Cooperation and Development (OECD).

But, economic health varied with China's output growing 7.6% and Italy's shrinking 2.6% due to recession. Taking global population growth into account, G20 output is effectively stagnating.  

In UK, most economists predict now that gross domestic product will be lower this year than in 2011, and many see only a sluggish recovery next year.

With this worrying statistics, officials from the world's 19 leading economies and the European Union are meeting in Mexico City for talks.

They are under particular pressure to act to moderate the impact of high food prices on households whose incomes are stagnating and shrinking due to the economic slowdown.

Drought has reduced harvests in North America whilst Russian grain exports have also fallen, pushing up global prices.

So, what does this mean?

It is makes sense to do business in the African region than anywhere else at the moment. The Eurozone is still in deep financial problems and America is just getting by. There are reports that Brazil is picking up and China's economy though healthy, is slowing due to the recession in Europe.